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What's Going To Happen To Greek Shippers?

What's Going To Happen To Greek Shippers?

This week, Greek Prime Minister Alexis Tsipras narrowly avoided another political meltdown after the nation's Parliament approved another set of belt-tightening measures that the nation's creditors demanded in exchange for a second installment of bailout funding.

Tsipras has been able to maintain high approval ratings despite the fact that he was forced to back down on his anti-austerity campaign promises in order to unlock desperately needed EU funding. However, the Prime Minister has fallen out of favor with Greece's shipping businesses, as the new austerity measures threaten to take one of the nation's largest industries abroad.

No More Tax Breaks

In Tsipras' preliminary deal with EU creditors, he agreed to raise taxes on Greece's shipping sector despite opposition from industry participants who claim the industry will be flattened without the tax breaks.

Part of the bailout agreement requires shipping companies to pay a flat fee for a ship's capacity. The fee is relatively consistent across the entire eurozone, but most nations provide tax benefits that significantly reduce the tonnage fee. By eliminating this tax break in Greece and forcing the nation's shipping firms to pay full price, industry execs say that Greece would become one of the most expensive countries to operate in.

Related Link: U.S. A Relative Sea Of Calm Amid Greece, China Tumult

Threats To Leave

In response to the proposed tax laws, ship owners say they will take their business elsewhere. Many of Greece's shipping heavyweights say the burden of doing business under a new tax law would be too much for their firms to bear.

Blow To Greece

Their threats to leave the country aren't likely to be ignored by Greek policy makers. The shipping sector makes up around 7.5 percent of Greece's GDP and employs upwards of 200,000 people.

For now, Athens has been reluctant to comment on the terms of the new tax rules as Greek officials discuss their proposal with shipping industry leaders to try to find a middle ground.

Image Credit: Public Domain

Posted-In: Alexis Tsipras GreeceEurozone Politics Top Stories Markets Best of Benzinga


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